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India's Maruti Suzuki shuts riot-hit car plant

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ASHOK SHARMA | July 21, 2012 09:55 AM EST | AP

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NEW DELHI — India's largest carmaker, Maruti Suzuki, said Saturday it will not resume production at a factory hit by rioting during a labor dispute until an investigation is complete into the causes of the violence, which killed one executive and injured dozens of others.

The plant, one of two operated by the company in India, halted production on Wednesday night because of fire damage caused by the rioting. The company is a subsidiary of Japan's Suzuki Motor Corp.

The body of Avnish Kumar, the human resources manager, was found badly charred in a conference room after the rioting. Of 90 injured managers and executives, 24 with arm and leg fractures are still being treated in hospitals, Maruti Suzuki said.

"What has happened is an absolute shocker to us," chairman R.C. Bhargava told reporters Saturday.

Bhargava said a new wage accord was being negotiated with the workers' union but there were no other outstanding labor issues.

He said production would not be resumed at the factory in Manesar in the north Indian state of Haryana "until we are able to identify the causes and apply correctives" to guarantee the safety of managers and workers.

The Manesar plant makes 550,000 vehicles a year, including Maruti Suzuki's most popular cars, the Swift and the DZire.

The company said the unrest on Wednesday was sparked when a worker beat up a supervisor. It said the union prevented management from disciplining the worker, blocked exit gates and "held the executives hostage."

The Maruti Suzuki Workers Union, in a statement Thursday, offered a different version of events, saying a supervisor had abused and made discriminatory comments to a low-caste worker.

Bhargava asked the Haryana state government to assist in investigating the violence. "We want to know the cause and who was behind it," he said.

The Press Trust of India news agency said police have arrested 88 Maruti workers on charges including murder and damaging property.

Labor unrest is a growing concern in India, as inflation squeezes workers' salaries. The widespread use of contract workers by companies eager to sidestep India's strict labor laws adds to friction.

Maruti Suzuki suffered three crippling strikes in 2011 which cost it market share and blocked production of tens of thousands of vehicles.

Honda, Ford, General Motors and Hyundai, among others, have also struggled with labor unrest in India.